Source : Medtech Insight
The two-decade journey of Corin Orthopaedics Holdings Limited through the orthopedics market, changing its portfolio and being taken into private equity, latterly under the ownership of Permira, has been nothing if not compelling. Not that the directors of the UK-based hip and knee arthroplasty specialist would have described it that way when the US metal-on-metal hip resurfacing issue in 2011 ended Stryker’s interest in hips, and thereby also its 10-year distribution agreement with Corin.
Corin had to look inwards, coming off the UK stock market, refinancing and assembling a new portfolio of technologies. It went under the radar for a while. It was later sold to private equity ̶ DeA Capital Alternative Funds SGR, Hunt Capital, IP (Investimenti e Partecipazioni) and other investors – who in mid-2018 sold a majority stake to a company backed by the Permira funds.
Corin UK Managing Director Paul Gibbons
Arguably, the company has undergone its most progressive development in the past two years. The takeover by Permira freed up the company to invest in M&A and enabled more strategic decision-making. Its 2018 sales forecast of £125m ($163m) was exceeded, followed by further significant M&A-assisted growth in 2019. Elective care dipped during the pandemic, and Corin’s performance, in common with care companies the world over, has suffered in 2020. ("The Personal Touch Ortho Implants Challenger Corin Creates Its Own Value Pathway" "In Vivo" )
Although powerless in some ways given the unfolding events, Corin’s senior management met the unexpected circumstances as best it could. COVID-19 is a “culture-defining moment,” Corin CEO Stefano Alfonsi, formerly of DePuy Orthopaedics Inc., said in the early stages of the pandemic. Alfonsi, who has been credited with steering Corin through its darker moments, said of COVID: “The way we react in this crisis will define our culture, our way of working together and eventually our company.”
Corin has an achievement-oriented culture. “The roles allow you to see the effect of what you do,” said Paul Gibbons, managing director of Corin UK. Gibbons, based at the group’s global headquarters in Cirencester, Gloucestershire, observed that senior executives at Corin are industry-seasoned. Many came from blue-chip companies. That is true of the recently-appointed chairman and non-executive director David Floyd, the ex-group president of orthopedics at Stryker.
The statement announcing the arrival of Floyd, and of Allan Ritchie, as non-executive director, listed Floyd’s full track record of senior leadership positions, including this at OrthoWorx, DePuy Orthopedics, Abbott Spine, AxioMed LLC and Centerpulse Orthopedics. Ritchie joined after 30 years with DePuy, latterly as VP of R&D, where he amassed market knowledge of Europe, the US, Japan and China.
Gibbons, too, brought long years of DePuy bioengineering and marketing experience to Corin when he joined in March 2017. The intervening three to four years have seen Corin undergo much change, he told Medtech Insight. Corin’s top-line challenge is an evergreen one, however: vying for a bigger share of the 10% of the $17.5bn global hip and knee primary and revision hip and knee replacement market that is not owned by the big four – DePuy Synthes, Zimmer Biomet Holdings, Inc., Stryker Corporation and Smith & Nephew plc.
Doing business in the UK is another challenge, said Gibbons frankly, observing that NHS England’s “Category Towers” procurement system tends to favor suppliers that have broad portfolios to which discounts can be linked. For companies like Corin, with specialist technology offerings, this is a potential hindrance to progress in the UK market. And that comes on top of the disruption to the UK elective care business that COVID-19 has caused to medtech manufacturers. ("UK Must Break The Cycle Of Pricing Pressure And Face Up To Medtech Value Needs" "Medtech Insight" )
Being squeezed by multinationals in the global market and having a battle to get properly noticed by NHS procurement, Corin must fight on its innovation, said Gibbons. Ways of delivering better care to younger people by using orthopedic implants that last longer – which has been a USP of the company since its earliest days – is the best way smaller players like Corin can compete with the “big boys.”
Corin is now putting its technology case more succinctly and has enlisted the Association of British HealthTech Industries (ABHI) to help get its message out in the market.
In the hip and knee segment, Gibbons defines Corin’s goal as using “proven implants and technology that allow surgeons to customize placements to the movement of the patient.” The data derived from Corin’s portfolio of technologies will create the insights that can be acted on by hospital managers, surgeons and even the government, he added.
One of these technologies, RPM (remote patient manager), is an app-based tracking tool that gathers pre- and post-operative data on hip implant patients and feeds it back to surgeons. They can assess whether a patient needs to come in for a consultation. It is a tool to guide better surgeries, inform post-op and physiotherapy care, and facilitates the better patient outcomes that all providers are striving for.
It is one element of CorinConnect, the company’s newly introduced cloud-based single access point for all its technology offerings.
Data on orthopedic interventions in the UK is held on the National Joint Registry (NJR). Other industry segments are not as advanced as orthopedics in registries, however this is an area that the UK’s post-Brexit devices legislation, the Medicines and Medical Devices bill, will have the scope to address. It is also a central demand of the recently issued Cumberlege report on patient safety. ("UK MHRA In The Spotlight As Cumberlege Review Puts Medtech Safety At The Top Of Health Agenda" "Medtech Insight" )
The challenge is for registries to become more outcomes focused. That is happening, Gibbons stressed, but many in industry still regard registries as a threat to innovation. Initiatives like the UK’s hospital data-gathering initiative, Beyond Compliance, are playing a useful counterbalancing role, in ensuring patient safety while managing the entry into circulation of innovative products. ("UK ortho industry moves to strengthen EU postmarket surveillance" "Medtech Insight" )
“With the MDR, we’ve got to ensure that we can balance innovation, cost and reliability of the CE-marking.” ̶ Paul Gibbons.
“With the EU Medical Device Regulation coming next year, we’re all going to have to gather more clinical data,” said Gibbons. The new regulation represents extra cost and complexity for companies. “We’ve got to ensure that we can balance innovation, cost and reliability of the CE-marking,” he said.
But the MDR’s costs and disruption have already arrived. Corin lost its original, UK-based, notified body, LRQA, in mid-2019, prompting a rush to appoint an EU27-based alternative. It chose TÜV-SÜD, whose working methods required adjustments by Corin, including the appointment of additional regulatory staff. The company has also had to cope with supplier changes ̶ and all this before the MDR is implemented in full in May 2021. ("Just Three UK Medical Device Notified Bodies Left As LRQA Pulls Out" "Medtech Insight" )
But how the MDR will operate is still not totally clear, in Gibbons’ view. “That is incredible, given that it was meant to be live already, and has been pushed back by a year,” he said. He also questioned the MDR’s rationale of seeking original clinical data for regulatory work such as device line extensions, and not to use risk ratings to decide on individual products. That is the rationale used by the voluntary initiative, Beyond Compliance.
The fear is that companies could be driven away from Europe to do their clinical data gathering in, say, Asia or South Africa, and use that in Europe. “If the cost becomes too much, people will move.”
That is not in Corin’s plans. The company is committed to the UK, and as it has grown its international footprint through M&A, it has made a policy of retaining the expertise and local business footprint of the acquired companies to use as a platform to build on.
In the case of Australian purchase Optimized Ortho, whose proprietary dynamic planning system, OPS, is used in hips, the aim was to keep the software and biomechanics technology hub intact. The same policy was applied to the 2019 purchase of US pioneer in robotic-assisted total knee replacement, Omni Orthopaedics Inc.
All Corin’s global manufacturing is centralized in the UK, however, apart from some coatings and sterilization. The purchase of Tornier’s assets was the first instance of foreign manufacturing being integrated into Corin’s UK manufacturing. It retains the technology hub in France. “That spreads Corin’s footprint. There are major strengths among the tech-savvy local experts,” said Gibbons. ("PatientSpecific Drive Takes Ortho Group Corin Into TKR Robotics With Omni Purchase" "Medtech Insight" )
The OPS technology assesses how the pelvis moves relative to the spine, and how a patient moves relative to their implant. The system, which uses 3D CT images, is especially beneficial for the 17% of hip implant patients who have unusual pelvic movements; for them, said Gibbons, getting the implant into the optimal position can only be achieved with OPS system, as other data cannot help see these aspects.
Since the OPS purchase, Corin has brought Sydney, Australia-based Global Orthopaedic Technology (GOT) into the group, with its knee and hip products and enabling robotics and navigation technologies. GOT has brought Corin more share of the local and differentiated product opportunities in the Australian market.
The CorinConnect data ecosystem now being rolled out was merely an idea two years ago, but has been developed rapidly and was launched in July 2020. Its go-live in hospitals has been hampered by COVID-19, but Gibbons makes the comparison between developing IT tools and the much longer R&D life cycles for the advanced polymer and metal-based technologies that are the foundations Corin built its business on. In that respect, CorinConnect has made the company “an exciting place to be.”
The company is now defining precisely what CorinConnect “means,” and what its main customer group – the surgeons – need from it. Increasingly, they want data, to be able to manipulate it and to base their decisions on it. "It is a space where data is an adjunct to treatment decisions," Gibbons stressed; and it is a similar approach to that taken by Google DeepMind and IBM Watson’s offering. “We’re not replacing surgeons, but helping them assess patients in order to deliver better surgery.”
Gibbons describes CorinConnect as the “wrapper” around its interventional technologies and support systems. These include RPM, an app-based patient tracking tool that supports behavioral modification; the Omni micro-positioning robot, which assesses the soft tissue envelope in a patient’s knee and calculates the best position for the implant using the unique BalanceBot; and OPS.
It is likely that the combined data insights from the new offerings from Corin in the future will be used for machine learning to assess which patients are at risk and provide the ability to identify trends earlier. Without connected data sets, these possibilities would remain impossible, said Gibbons. Population health management is taking off in orthopedics, albeit slowly, but the benefits will increase over time as usage picks up, he insisted.
Digitally-enabled hospitals are the natural champions of CorinConnect, and some Corin key accounts are at thresholds that make acquiring the ecosystem “wrapper” a sensible option. The target hospitals are forward-looking and have the right infrastructure to use the technologies, said Gibbons, stressing the need to pick the candidate providers carefully.
COVID-19 has made getting physically on site in hospitals much more difficult for anyone not in frontline care. Corin sales staff are now gradually returning to care settings, but only to support specific cases. Private hospitals in the UK are seemingly hesitant to return to their former routines while operating under contract for the government during COVID-19. ("UK Medtech Industry Seeking More Clarity On Restart Of Elective Procedures" "Medtech Insight" )
For Corin, the priorities during COVID-19 were to protect its team and cash flow and to ensure the company came through the pandemic intact with a platform for recovery and growth. Corin’s portfolio was not COVID-19 attuned at all, but the company was ready to offer its manufacturing capacity to make ventilators. The offer was ultimately not taken up by the UK government.
The company furloughed UK sales and manufacturing staff, while keeping some other teams on. A skeleton staff ran the company, said Gibbons, and business was hard through April, May and June. In July, a small surge in activity became evident, and staff began to return. Corin is still in the phase of slowly stepping up, after business being frozen for four months. “It’s a more optimistic outlook now, and good to get back into hospitals and to be working with them again.”
The next few months will remain difficult from a business point of view, as the UK remains in a state of “orthopedic restart.” Whether NHS England's 90% activity resumption target by November can be realised is debateable, said Gibbons. Activity levels were still only at 40-50% in mid-September. But the ambition of the NHS chief executive was commendable, in the Corin UK managing director’s view, inasmuch as it roused the sector and focused the mind. ("COVID19 UK NHS Chief Calls For 90 Return To Planned Care Within 3 Months" "Medtech Insight" )
The biggest shift under COVID-19 has been that people are now in no doubt that virtual clinics are possible. Some 60% of doctor’s surgery appointments can be done remotely. “Our job is to work with that changing mindset and show that the real benefit of these tools is to make hospitals more efficient and better able to treat the backlog of patients.”
Coming out the other side of the pandemic, post-COVID, the medical device world is a good place to be, said Gibbons. The period leading into 2020 was a good time for sales for Corin, he said, but the cancellation of planned and elective care in spring hit Corin hard. At one point in 2020, the company was 50% down on targeted joints completed. It has recently reached 60% of 2020 monthly targeted levels. But the 24% CAGR of two years ago remains a performance that Corin cannot match at present.
Omni is expected to carry much growth once the pandemic has wound out. Gibbons rates the robotic tool as crucial to the next stages of Corin’s market development and believes it will accelerate the knee portfolio just as OPS had done for the hips business. Omni is being placed at good levels in France, Germany, Switzerland, Austria, Israel, Australia and the US.
Permira was supportive of Corin’s move into robotics, Gibbons observed. The possibility of a positioning tool for hips is also being assessed, based on a common Omni platform that is connected to enable data sharing.
COVID-19’s challenges have compelled Corin to react to the culture shift referred to by Alfonsi, which has led to the company adopting video conferencing alongside in-person, socially-distanced, technical sessions on its new robot.
Reacting to the final shape of Brexit will be another challenge, and although Corin manufactures in the UK, elements like raw material costs, not to mention disruption to shipping of goods, are threats of unknown magnitude. And accommodating the EU MDR’s higher requirements will require coping strategies.
In those major shifts, the medtech industry has often been a passenger, but in technology innovations and supporting the integration of value-based health care, it can be the driver of agendas. For Corin, this means looking beyond technologies where the clinical outcomes are suboptimal, and instead focusing on the clinical benefits that create value.
“That’s the way we’re heading, and it helps if we can provide the surgeons with more information on how to deliver better outcomes based on the data that is generated,” said Gibbons. This enables better treatments for all patients, he added, but it especially important in younger, active patients, who want better value for longer from their joint replacements.
By Ashley Yeo